Energy Prospectus

I have been tracking this company for over eight years and I have a high level of confidence in my forecast model. I believe it is a "Screaming Buy" at today's price. There is way too much "noise" about its ability to keep paying high (over 13% annual yield) dividends. IMO this is a GROWTH COMPANY. Lightstream has double digit production and proven reserve growth locked in. Below are highlights from their Q3 results. I am working on my forecast model and will have more later. - Dan

Lightstream Resources Ltd. (LTS.TO and LSTMF)

THIRD QUARTER FINANCIAL & OPERATING HIGHLIGHTS
•Third quarter production averaged 45,160 barrels of oil equivalent per day ("boepd") (78% light oil and liquids), an increase of 17% from the third quarter of 2012 and relatively flat to the second quarter 2013. Year to date average production is 13% above 2012 levels.
•Our operating netback for the third quarter was $54.75/boe, a 9% increase over the second quarter of 2013 and a 21% increase over the third quarter of 2012, driven by higher WTI prices, which averaged US$105.83/bbl.
•Funds flow from operations was $180 million ($0.91 per basic share) for the quarter, representing a 7% increase over the second quarter of 2013 and an increase of 47% over the third quarter of 2012.
•Capital expenditures before acquisitions and dispositions totalled $141 million in the third quarter, resulting in 24 wells drilled and 20 wells placed on production, with 19 wells in inventory at the end of the quarter.
•During the quarter, our funds flow from operations (cash in) exceeded our net capital and cash dividends (cash out) by $8 million.

OUTLOOK AND GUIDANCE

As the end of the 2013 approaches and we finalize our plans for 2014, we continue to work towards executing our business model that provides long-term growth plus yield. With the completion of our remaining 2013 capital program, we are on target to exceed the lower end of our forecasted 8% to 12% annual average production growth (46,000 to 48,000 boepd), and we continue to target exit production in excess of 47,000 boepd and annual capital expenditures of $700 to $725 million. As previously discussed, oil price differentials to WTI have widened in the fourth quarter, and we are currently anticipating differentials of approximately 17.5% in the quarter. As a result of the lower realized prices caused by the widening differentials, we are reducing our forecasted annual funds flow from operations by $15 million to a range of $665 - $705 million.

Our long term business plan of delivering sustainable growth and dividend income (based on cash outflows matching cash inflows) with a debt to funds flow from operations ratio of 2 or less is based on our light oil weighted assets generating strong cash flows and our large inventory of opportunities delivering long-term growth. Our sustainability and debt to funds flow ratios currently exceed our long term targets, but we continue to focus our multi-year plan to reduce debt levels and achieve a sustainability ratio of 100%. In 2013, we executed a balanced capital program, which is approximately 25% lower than our 2012 program, to work towards these milestones. We continue to evaluate a number of options available to us to continue to advance our business plan and plans for 2014 will be released along with our scheduled 2014 guidance conference call on November 21, 2013.

Lightstream Resources Ltd. (LTS.TO and LSTMF): An updated Net Income & Cash Flow Forecast model has been posted under the Watch List Tab.

My Fair Value Estimate is $13.60Cdn/share for LTS.TO (slightly lower for LSTMF)

"Looking at Lightstream's production breakdown, you can see why they are in a better position than many Canadian oil producers. Of the 35,445 barrels of oil and NGLs Lightstream produced, 55% came from the Bakken or Southeast Saskatchewan. This oil generally fetches prices that are much closer to WTI prices than other Canadian oil. This is one reason Lightstream enjoys such high netbacks." See article below for more details on LTS.

http://seekingalpha.com/article/1821992 ... urce=yahoo